When the federal government began requiring hospitals to post their prices at the beginning of this year, CMS Administrator Seema Verma praised the initiative and declared that revealing this financial information would “. . . empower patients.”  Three months into the effort, do consumers have more transparency and choice, is there increased price competition among hospitals, or are patients feeling let down and confused while still waiting to feel empowered?

To date, the well-intentioned effort to let patients in on the pricing policies of hospitals has been functionally useless. Hospital prices are being posted using obscure abbreviations that even seasoned hospital administrators might find difficult to translate.  In many cases, hospitals have posted spreadsheets that list thousand of individual prices, detailing every drug, procedure or medical device but failing to aggregate these costs into meaningful totals that could be understood by patients. Even patients facing elective surgery, with adequate time to research a pending hospital stay, would be unable to make sense of the potential cost, much less compare costs between competing hospitals. For the person in an emergency situation, this level of scrutiny, or any scrutiny at all, is well out of reach. Additionally, real-world actual costs will vary from patient to patient, depending on the type of coverage they have as well as the amount of their individual deductible.

The current plan to post hospital prices originated with the Obama administration and was implemented by the Trump Administration. There is plenty of blame to go around in this bipartisan mess. Politics aside, it is a cruel insult to consumers to call this effort transparent. Compounding the insult to consumers, the federal government has not implemented any enforcement mechanism of the new requirement, instead asking the public to suggest “enforcement mechanisms” while hospitals struggle to make sense of the requirements.

Defenders of the administration’s action says that it is a meaningful first step towards pricing transparency, but it’s hard to see the current approach as anything other than a misstep. Individual patients facing elective surgery need at least a clear estimate of what the range of their costs might be.  All patients, even those who have had emergency treatment, need to be billed promptly for hospital services, and given an appropriate amount of time to pay for these unexpected medical expenses.

Given the complexity of our healthcare system, it’s a challenge to determine which entities are in the best position to provide clear cost information to patients, but health insurers are the most logical place to start. Medicare and other insurers are able to process billing information after a procedure, they also have the capacity, based on existing data, to project the total cost of a proposed procedure to patients enrolled in their plans before the procedure. Processing and publishing this treasure trove of data would give the consumer a meaningful start of making important health-care decisions, and generate the competition among hospitals that could both improve care and bring own out-of-control medical costs.